Some horseracing fans looking to place online bets for the 134th Kentucky Derby this weekend may find their transactions blocked by banks and credit card companies trying to avoid running afoul of unclear federal regulations, gaming and banking industry experts said Thursday.

“Unless the government takes the responsibility of telling the banks which merchants they shouldn’t deal with, and when banks take the position that they are not going to process these transactions without guidance, all heck will break loose,” said Tony Cabot, an attorney with the Las Vegas firm Lewis and Roca, which represents the Nevada Pari-Mutuel Association.

Advocates for the banking and online gambling industries, legal scholars and several members of Congress are pushing the U.S. Treasury, the Federal Reserve and Justice Department to clarify whether a regulatory exemption in the Unlawful Internet Gaming Enforcement Act that allows Internet gambling on horseracing could also mean banks and credit card companies would be penalized for processing the money from those wagers.

Under the law, passed in 2006 as part of the SAFE Port Security Act, the nation’s banks and credit card companies are prohibited from accepting payments for online bets or wagers. However, the financial institutions are largely left to figure out which gambling transactions are illegal, and block payments.

Financial institutions say this unfairly puts them in the position of trying to decide what is legal and what is not with very little clear guidance from the federal agencies responsible for implementing the rule.

Click here to go to the article and read more.

Author Contact Info: Halimah Abdullah